If you thought lawsuits against 401(k) plans were dead, think again. Renowned plaintiff’s attorney Jerome Schlichter won a battle against Ameriprise when a federal judge in St. Paul, MN refused to dismiss Schlichter’s case, which claims that the 14,000 participants in Ameriprise’s $1 billion plan paid higher fees than they should have because proprietary funds were offered on the platform.
While most fee-focused lawsuits are brought against larger plans, their success might create incentives for class action plaintiffs’ lawyers to go after smaller cases. With hundreds of thousands of DC plans covering tens of millions of participants and trillions of dollars at stake, it sounds like fertile ground. Will employers respond by hiring better quality plan advisors to help protect them? Will they just eliminate their plans? Stay tuned.
